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Shale is Fracking Green
Americans Staying Warm the Green Way

American power plants burned more natural gas last month than ever before. Reuters reports:

Power generators used an average 23.1 billion cubic feet per day of gas in January 2015, up 13 percent from the 20.5 bcfd average in January 2014, according to Thomson Reuters Analytics.

That was the most gas consumed by the power sector during the month of January on record, according to federal data going back to 1973.

The shale boom has unleashed a torrent of new sources of natural gas, and that abundant supply has depressed prices to the point that its squeezing out other potential power sources. American coal consumption is being hit by this, which is notable for two reasons: first, coal is often thought of as the cheapest fossil fuel around, which makes the fact that natural gas is displacing it all the more impressive. Second, coal is a dirty energy source, in terms of both local air pollution and greenhouse gas emissions. Burning natural gas as opposed to coal can cut those emissions in half.

So this winter, know that not only has the shale boom keep heating bills down across America, but that it’s been a boon for the environment as well.

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  • FriendlyGoat

    Glad to know that TAI has appreciation for levels of emissions. Keep trying, because you have some readers here who still don’t believe you.

  • SLEcoman

    Let’s put this in perspective. According to preliminary EIA data, coal-fired power plants provided 39% of power generated and natural gas fired power plants provided 26% of US power production in Jan ’15. EIA is projecting that coal will produce 40% and natural gas will produce 25% of US power production in Feb ’15. This compares with coal = 45% & natural gas = 23% in Feb ’14. Why is natural gas projected to have higher market share in Feb ’15 than Feb ’14?

    1. Many natural gas fired power plants were put on curtailed natural gas supply in Feb ’14 because there was inadequate natural gas supply due to the severe winter. Power plants were curtailed to ensure adequate natural gas supply to residential and commercial heating.

    2. The price power plants pay for natural gas is projected to be much lower in Feb ’15 than actual prices paid in Feb ’14 ($3.85/MMBtu vs. $7.39/MMBtu)

    Recent experience has shown that natural gas fired power generation can gain market share from coal-fired generation in the winter as long as it isn’t too cold.

    I would also point out that current natural gas prices for producers (e.g. $2.70/MMBtu @ Henry Hub) are too low to support current levels of natural gas production. It is important to recognize that lower oil prices mean that US natural gas prices will have to be higher in the future because:
    1. There will be less oil drilling; therefore less natural gas associated with oil drilling will be produced.
    2. Lower oil prices means lower prices for NGLs (natural gas liquids) which have been providing a significant auxiliary income stream for wells drilled to primarily produce natural gas.

    Note: to convert $/MMBtu to an equivalent oil price, multiply by 6 (i.e. $4.00/MMBtu = $24/ bbl oil).

  • Voodude

    Coal-fired power actually costs about $0.01-$0.03/kWh. Canadian.

    McKitrick: “At current prices for coal and Alberta’s new 40% efficient, supercritical pulverized coal-fired power plants, the generating cost from coal is just 2.5 cents/kWh. Natural gas at today’s price is 4.8 cents/kWh” Canadian, of course..
    Germany’s residential electricity cost is about (US)$0.34/kWh or a lot more; in Texas it is about (US)$0.08/kWh.

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